Camarilla Levels Binary System For MT4
Table Of Contents:
- Camarilla Levels Binary System For MT4
- Call option setup
- Put option setup
- Dealing with the risk exposure
Please note: This strategy was publicly published in the trading community and is free to use. We do NOT make an attempt to decide if this strategy is profitable or not, because we know that the major factors regarding trading results are the skills/experience of the trader who executes the strategy. Therefore, we are mainly explaining the components and rules of the strategy. If applicable, we are highlighting advantages, disadvantages and possible improvements of the strategy.
The Camarilla Levels Binary System For MT4 is a classic strategy that depends on the camarilla levels. In the past, the traders used to calculate the camarilla levels with complex formulas. But advanced indicators can paint out the camarilla levels in the price chart with a high level of accuracy without any deviation.
To use this system, you have to know some specific sets of rules. Having a fair knowledge about the pivot level is a great advantage. Camarilla levels are just like your support and resistance level but it adds more weight to the current situation of the market. In case the camarilla levels coincide with fibo or the moving average, you have a great advantage as these levels tend to hold better.
Smart traders often relate this level with the price action signals so that they can improve accuracy. As the camarilla levels are much closed for the ranging market, you must choose a trending asset. The benefit of trading the trending asset is a high risk to reward ratio. Since you will be dealing with the options market, you will get a decent profit from this industry. But don’t put yourself in great by increasing the risk exposure of this trading method.
As the template is embedded with sophisticated coding, you will get the unique long and short trade signal at an important level. And signal should match the raw price action at that instant. If it doesn’t, you should not take the trade as it might be a false setup, or the market sentiment is not prepared for such movement. Let’s learn to execute call and put options with this amazing trading method.
Call option setup
The trend is always important. If you can find the bullish trend and take the call option at the corrective price movement, you have a better chance of winning. If not, you can use a different formula. Considering the different levels of traders, we will discuss a generic way that will allow you to take a call option at any market condition that has a chance to go higher.
For this method, we will be using two significant lows of the market. In case you have more than two significant lows, it is much better since the support zone will be more valid. Note that we are telling you support zone not support level. A zone is a region where the bulls might find a place to push the price where. On the contrary, a support level is a perfect place where the bulls should start pushing the price higher. Camarilla levels provide such support level to the traders.
If you get the long signal below the yellow dashed pivot line, you should take the call option after the break of the yellow line. If the bullish break takes place with a strong candle, you must wait for the price to drop to the yellow dashed line.
Taking the call option at retracement allows you to earn more money since the stop loss is much tighter. In case, you take trades in the options market the return will be much higher.
Put option setup
Executing the put option follows a similar process of long trade setup. But we will give you some advanced tips by which you can improve the efficiency of the trade. Try to find a downtrend and then wait for the bullish correction in the price.
If the bulls manage to push the price to the camarilla level, you should wait for the short text to appear. Camarilla level short text means the level is valid and the price has a chance to fall. But this is not the only thing a pro trader will look for. They will visually examine the level and see if it coincides with other important levels.
If the bullish correction is too big, you might have a winning trade even though the setup says you to short the asset. So, how can you see your capital from such a massive problem? You have to evaluate the highs and lows. Since the trend is down, no matter what the market should not create a new high. If it does, there is a chance the price might try to change the trend. So, it’s always better to avoid taking the trades when the short signals appear on the north side of the chart.
The momentum of the market must be bearish to short the asset. After doing all the match, you might not be able to win the trade. But this should be accepted by you in a normal way. It’s just part of this game. For this reason, elite traders always recommend not to risk more than 2% of the account balance.
Dealing with the risk exposure
Dealing with risk exposure should be your main priority when you use this method. The professional risk only 1% when they trade with the minute chart. In case they trade with the hourly chart, they risk 1-2% of the account balance.
Those who are extremely experienced and strong knowledge about the camarilla levels and the pivot point can take risks up to 3%. Try to blend the price action signals at the camarilla level as it will allow you to trade with tight stop loss. Making money, in the long run, is not all tough as it seems. If you can take the trade with managed risk and focus on the core concept of trading, you will be able to boost up the profit to a great extent.
Always remember, trading should be done in a relaxed way. If you take too much risk or try to increase the risk factor to improve your equity growth, you are making a big mistake. And try not to trade during the major news as it can create confusion in mind. Some of the retail traders often take trade in the choppy market and they lose money.
But taking trades on the choppy market is another big mistake. Pick the trending market that allows you to secure profit without having any issue. Take your time and learn more about the Camarilla Levels Binary System For MT4.
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